Michael Finney: Auditor General report found MEDC work to be ‘effective’

September 30, 2013

in MEDC Programs,Michigan News

Missing in all the media attention of Tuesday’s Auditor General Report on 10 Michigan Economic Development Corp. programs is any mention of the audit’s overall conclusion. Verbatim, from the report: “We conclude that MSF’s and the Strategic Economic Investment and Commercialization Board’s process for awarding grants, loans and contracts for economic development through the 21st Century Jobs Trust Fund program were effective. Our audit report does not include any reportable conditions related to this audit objective.”

An independent third party found our work effective and without reportable conditions. Beyond the overall conclusion that the program is effective, the audit found three areas for improvement. Its reportable findings proscribed the need to improve in our monitoring, measuring effectiveness and reporting. We agree with these findings and have already begun to address them.

What stoked the overheated news reports were mentions of job creation numbers for programs that were developed to provide assistance for start-up businesses. These programs were instituted between 2006 and 2010, when our state was in the full throes of record-setting job losses. The FY 2012 annual report submitted to the Legislature by MEDC was accurate based on jobs reported by each company. The Auditor General recommended that when material changes happen, subsequent to a company submitting their annual employment numbers, MEDC should include a footnote in our report to avoid confusion. We agree with the Auditor General’s recommendation and will include any changes in future reports.

Despite headlines or accusations, we did not mislead or overstate any jobs numbers. We provided accurate information at the time of the report.

The 21st Century Jobs Fund of those days was intended to stretch the definition of what is possible. It disbursed hundreds of millions of the state’s tobacco settlement dollars in hopes of commercializing Michigan research into profitable businesses.

The MEDC of today is a very different operation. Gone are wild bets on unproven technologies. We now budget every incentive dollar on an annual basis with the cost of these programs known in advance.

MEDC today offers programs to serve a much broader range of Michigan businesses in ways that cost little and yet foster new business growth in the state. Pure Michigan Business Connect helps Michigan companies find new sales opportunities from some of the state’s largest corporate procurement offices. Our capital access programs support loans to small businesses regardless of industry or region of the state. Our talent programs work with Michigan residents to find new jobs and build new careers in a changing global market. And newly launched Community Ventures has already put more than 1,000 structurally unemployed residents in our urban communities back to work. And YES, we thoroughly audit company provided data before disbursing funds, to ensure State of Michigan resources are not wasted.

We are cleaning up the reporting problems the Auditor General raised. They should not cloud the reality we are building today. Michigan offers a business climate that is far more attractive based on sound business policy and doesn’t depend on billion dollar gambits.

Mike Finney, President and CEO

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